Jenner & Block: Managing Water Risks: Carbon Disclosure Project's Water Disclosure

   By E. Lynn Grayson, Partner, Jenner & Block

In this Analysis, E. Lynn Grayson discusses the Carbon Disclosure Project (CDP) and examines its first water-related information request. She writes:

     The Carbon Disclosure Project (CDP) has issued its first water-related information request to 302 of the world's largest companies in sectors that are water intensive or face particular water risks. Since 2003, the CDP has issued carbon and climate change information requests on behalf of investors. With the launch of the CDP Water Disclosure in late 2009, the organization acknowledged that much of the impact of climate change will be manifested through increasingly scarce water resources and that these possible water risks needed to be better understood by investors.

     According to the 2009 Ceres report, Water Scarcity and Climate Change: Growing Risks for Business and Investors, decreasing water availability, declining water quality and growing water demands are immense challenges to businesses who have historically taken clean, reliable and inexpensive water for granted. The report concludes that climate change will exacerbate these growing water risks and that reduced water supplies from shrinking glaciers and melting snowcaps that sustain key rivers already are adversely impacting growth and new development. In a new report issued by the National Resources Defense Council (NRDC) in July 2010 titled Evaluating Sustainability of Projected Water Demands Under Future Climate Change Scenarios, the NRDC concludes that over 1,100 U.S. counties will see greater risks of water shortages due to climate change and 400 of these counties will face extremely high risks of water shortages. These reports provide the latest support for the growing consensus that water scarcity is a critical concern facing businesses, both now and into the future.

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